BEAUFORT COUNTY, SOUTH CAROLINA ORDINANCE

Transcription

1 BEAUFORT COUNTY, SOUTH CAROLINA ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT EXCEEDING $17,800,000 OF GENERAL OBLIGATION BONDS TO PROVIDE FUNDS FOR CAPITAL PROJECTS OF THE COUNTY; FIXING THE FORM AND DETAILS OF THE BONDS; AUTHORIZING THE CHAIR OF COUNTY COUNCIL AND THE COUNTY ADMINISTRATOR OR THEIR DESIGNEES TO DETERMINE CERTAIN MATTERS RELATING TO THE BONDS; PROVIDING FOR THE PAYMENT OF THE BONDS AND THE DISPOSITION OF THE PROCEEDS THEREOF; AND OTHER MATTERS RELATING THERETO. JUNE 12, ,_... ~ ~ ~ t '!i' ' -~.I

2 TABLE OF CONTENTS Section I. Findings...! Section 2. Authorization and Details of Bonds... 2 Section 3. Delegation of Certain Details of the Bonds to the Administrator and Chair... 2 Section 4. Registrar/Paying Agent... 3 Section 5. Registration and Transfer... 3 Section 6. Record Date... 4 Section 7. Lost, Stolen, Destroyed or Defaced Bonds... L...4 Section 8. Book-Entry-Only System... -:':'.~.~.~:~::.. ~;,... 4 Section 9. Execution ofbonds... ~... ":~... 5 Section 10. Form of Bonds... ~... ~... ~...:... 5 Section I I. Security for Bonds...::...-:':.:... 5 S ectton. 12. E xempt10n. fr om T axatton.... "' ' '!... '. 5 Section 13. Sale of Bonds, Form of Notice of Sale...::...:..:.. :..~... 6,.t - " - ~ fo,. r' 1 l ' Section 14. Depostt and Use of Proceeds...:...:.. ~.:...:...::...:... ~.. ~... 6 Section 15. Preliminary and Final Official Statement...:...:.:.::... f.~:~...:...:'!.~... 6 Section 16. Defeasance... 6 Section 17. Authority to Issue Bond Anticipation Notes... 8 Section 18. Details of Bond Anticipation Notes... 8 Section 19. Security for Bond Anticipation Notes Section 20. Tax and Securities Laws Covenants... 9 Section 21. Notice Pursuant to Section , paragraph 8, of the Code of Law of South Carolina, Section 22. Retention of Financial Advisor and Other Suppliers... I 0 Section 23. Authorization to Execute Documents Section 24. General Repealer... II EXHIBIT A Description of Projects... A-I EXHIBIT B Form ofbond... B-1 EXHIBIT C Notice of Sale... C-1 EXHIBIT D Form of BAN... D-1 EXHIBIT E Notice of Adoption of Ordinance... E-1

3 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT EXCEEDING $17,800,000 OF GENERAL OBLIGATION BONDS TO PROVIDE FUNDS FOR CAPITAL PROJECTS OF THE COUNTY; FIXING THE FORM AND DETAILS OF THE BONDS; AUTHORIZING THE CHAm OF COUNTY COUNCIL AND THE COUNTY ADMINISTRATOR OR THEm DESIGNEES TO DETERMINE CERTAIN MATTERS RELATING TO THE BONDS; PROVIDING FOR THE PAYMENT OF THE BONDS AND THE DISPOSITION OF THE PROCEEDS THEREOF; AND OTHER MATTERS RELATING THERETO. BE IT ORDAINED BY THE COUNTY COUNCIL OF BEAUFORT COUNTY, SOUTH CAROLINA, AS FOLLOWS: SECTION 1. Findings. The County Council (the "County Council") of Beaufort County, South Carolina (the "County"), hereby finds and detennines: {"".,~ l~.. ~ (a) Article X, Section 14 of the Constitution of the st?tte.. ofsouti/carolina, 1895, as amended (the "Constitution"), provides that counties may incur general...,. obligation bonded indebtedness upon such ~.., terms and conditions as the General Assembly may prescribe by general law subject to the following limitations: (i) such debt must be incurred only.for a purpose which is a public purpose and a corporate purpose for a county and (ii) unless excepted therefrom, such debt may b'e issued l iri' an amount not exceeding eight percent of the assessed value of all taxable property of such county (the "Bonded Debt Limit")... (b) Pursuant to Chapter 15, Title 4, Code of Laws of South Carolina 1976, as amended (the same being and hereinafter referred to as the "County Bond Act"), the governing body of any of the counties of the State may issue general obligation bonds to defray the cost of any authorized purpose and for any amount not exceeding such county's applicable constitutional limit. (c) The County Bond Act provides that as a condition precedent to the issuance of bonds an election be held and result favorably thereto. Chapter 27, Title I I, Code of Laws of South Carolina 1976, as amended (the "Article X Enabling Act") provides that if an election be prescribed by the provisions of the County Bond Act, but is not required by the provisions of Article X, then in every such instance, no election need be held (notwithstanding the requirement therefor) and the remaining provisions of the County Bond Act shall constitute a full and complete authorization to issue bonds in accordance with such remaining provisions. (d) As of May I, 2006, the principal amount of outstanding bonded and general obligation indebtedness ofthe County which was issued subsequent to the effective date of the ratification of Article X and was not issued pursuant to a referendum is $83,760,294 (which amount excludes (i) bonds issued prior to November 30, 1977, (ii) bonds issued pursuant to a referendum, (iii) bonds issued under Article X, Section I 2 of the Constitution and (iv) bonds issued to refund or advance refund bonds described in (i), (ii), or (iii)). (e) The assessed valuation as of June 30, 2005, of all property in the County for purposes of computation of the Bonded Debt Limit is not less than $1,538,499,781 according to the Auditor of the County. Eight percent of this assessed valuation is $123,079,982 (the "County's Bonded Debt Limit"). The difference between the County's Bonded Debt Limit of $123,079,982 and the principal amount of general obligation indebtedness subject to the County's Bonded Debt Limit of $83,760,294 is the amount of bonded indebtedness which the County may incur without a referendum, being $39,3 I 9,688.

4 (f) The County Council finds that is in the best interests ofthe County to provide for the issuance and sale of general obligation bonds of the County pursuant to the provisions of the Constitution and laws of the State of South Carolina for the purpose of providing funds to defray a portion of the costs of certain capital projects of the County as described on Exhibit A hereto (the "Capital Projects"), and contingencies relating thereto, which such list of Capital Projects may be amended from time to time by the County Council as the needs of the County warrant, and paying the cost ani! expenses of issuance of said bonds and, if bond anticipation notes are.issued pursuant to Section,J7 of this Ordinance, interest on said notes. The County anticipates that any bonds or notes issued hereby may be/payable from amounts to be received from other sources and that the Council may adopt a' resohitiori upon the issuance of any such bonds or notes designating the source of payment which may result in the bonds being bonds issued under Article X, Section 12 of the Constitution and, hence, not subject'to'th e Bo'!.ded Debt Limit. :.,~n;~'=::~-, ~-~t:v.l.. -., 0 ~".t?.~,.,~.. SECTION 2. Authorization and DetailS of Bonds. Pursuant to the provisions of the Constitution and laws of the State of South Carolina, there is hereb:y'a"uthori/ed 'to be issued general obligation bonds of the County in one or more series for the purposes set forth in paragraph l(f) above in an aggregate amount not exceeding $17,800,000. The bonds authorized hereunder shall be identified as "General Obligation Bonds of Beaufort County, South Carolina" (the "Bonds"). In order to reduce issuance costs, the Bonds may be issued as part of a larger issue of bonds comprising the Bonds and separately authorized bonds. The proceeds of the Bonds will be used to defray a portion of the costs of the Capital Projects and to pay the costs and expenses associated with the issuance of the Bonds. The Bonds may be designated with such further series description and designation as shall be determined by the County Administrator of the County prior to any sale. The Bonds may be issued in one or more series and may be sold in conjunction with any other bonds heretofore or hereafter authorized. The Bonds will initially be issued under the DTC Book-Entry-Only System in the form of single fully registered bonds in the aggregate principal amounts maturing in each year, registered in the name of Cede & Co. as the registered owner and nominee of The Depository Trust Company, New York, New York, which will act as securities depository for the Bonds. The Bonds shall be dated as of the first day of the month in which the Bonds are delivered to the initial purchaser(s) thereof or such other date as shall be selected by the County Administrator; shall be in denominations of $5,000 or any integral multiple thereof not exceeding the principal amount of the Bonds maturing in each year; shall be numbered from R-1 upward with an appropriate series designation, if any; shall bear interest from their date as may be accepted by the County Administrator at the time of the sale thereof; and shall mature in annual installments as determined by the County Administrator. In determining the rate at which the Bonds bear interest, the County Administrator may provide that any of the Bonds authorized hereby shall bear interest at a rate that changes from time to time based on an auction, a relationship to an external index or by determination of an agent designated for such purpose that does not own or invest in the Bonds. Both the principal of and interest on the Bonds shall be payable in any coin or currency of the United States of America which is, at the time of payment, legal tender for public and private debts. SECTION 3. Delegation of Certain Details of the Bonds to the Administrator and Chair. The Council hereby expressly delegates to the County Administrator and the Chair the authority, with respect to the Bonds or any series thereof, to determine (a) whether to issue the Bonds in one or more series and the principal amount, the date of sale, the maturity schedule and initial interest payment date of each such series of Bonds (b) the redemption provisions, if any, for the Bonds; (c) whether to use bond insurance with respect to the Bonds, and if so make appropriate arrangements therefor; (d) whether to employ a financial advisor, upon the advice of bond counsel, in connection with the issuance of the Bonds; (e) whether to award the Bonds on a net interest cost or true interest cost basis; (f) whether the Bonds shall bear interest at a fixed or variable rate; (g) whether the Bonds will be designated as "qualified tax-exempt 2

5 ... " '. "--' ' L ~ ' '.".. ~ \. ' obligations;" (h) whether bond anticip~tion notes shall be issued pursuant to the provisions of Section 17 of this Ordinance; (i) whether to publish rtoiice of the adoption of this ordinance under the provisions of Section (8), Code of Laws of South Carolina, 1976, as amended; and (j) such other matters regarding the Bonds as are necessary or appropriate. In making such determinations, the Chair and County Administrator are directed to take into account the amounts available in the County's debt service fund and to minimize increases and changes in the millage rates of taxes levied for the payment of the Bonds. The Chair and County Administrator are further directed to consult with bond counsel in making any such decisions. The County Administrator is hereby authorized and directed to conduct the sale of a series of Bonds pursuant to the provisions of Section 13 hereof. The County Council hereby expressly delegates to the County Administrator the authority to award the sale of any Bonds in accordance with the notice of sale set forth in Section!3, provided that the net interest cost or true interest cost of the Bonds shall not exceed 6% unless authorized by a separate resolution of the County Council. SECTION 4. Registrar/Paying Agent. Both the principal of and interest on the Bonds shall be payable in any coin or currency of the United States of America which is, at the time of payment, legal tender for public and private debts. During such time as the Bonds are held in book-entry-only form, the Office of the County Treasurer or the County Controller or a qualified financial institution shall serve as the Registrar/Paying Agent for the Bonds (the "Registrar/Paying Agent") and shall fulfill all functions of the Registrar/Paying Agent enumerated herein. In the event the Bonds are no longer held in book-entryonly form and no other securities depository is named, the County shall appoint a Registrar/Paying Agent for the Bonds. SECTION 5. Registration and Transfer. The County shall cause books (herein referred to as the "registry books") to be kept at the offices of the Registrar/Paying Agent, for the registration and transfer of the Bonds. Upon presentation at its office for such purpose, the Registrar/Paying Agent shall register or transfer, or cause to be registered or transferred, on such registry books, the Bonds under such reasonable regulations as the Registrar/Paying Agent may prescribe. Each Bond shall be transferable only upon the registry books of the County, which shall be kept for such purpose at the principal office of the Registrar/Paying Agent, by the registered owner thereof in person or by his duly authorized attorney upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar/Paying Agent, duly executed by the registered owner or his duly authorized attorney. Upon the transfer of any such Bond, the Registrar/Paying Agent on behalf of the County shall issue in the name of the transferee a new fully registered Bond or Bonds, of the same aggregate principal amount, interest rate and maturity as the surrendered Bond. Any such Bond surrendered in exchange for a new registered Bond pursuant to this Section shall be canceled by the Registrar/Paying Agent. The County and the Registrar/Paying Agent may deem or treat the person in whose name any fully registered Bond shall be registered upon the registry books as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of the principal of and interest on such Bond and for all other purposes and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisf'y and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the County nor the Registrar/Paying Agent shall be affected by any notice to the contrary. In all cases in which the privilege of transferring Bonds is exercised, the County shall execute and the Registrar/Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance. Neither the County nor the Registrar/Paying Agent shall be obliged to make any such transfer of Bonds during the period. beginning on the day after the 15th calendar day of the month next preceding an interest payment date on such Bonds and ending on such interest payment date. A Pf_,>'"'~ 3,...,_-.-"".... -~/) ~ "'.. :-' ~..,.... ~ ~,:'F..,..!

6 SECTION 6. Record Date. The County hereby establishes a record date for the payment of interest or for the giving of notice of any proposed redemption of Bonds, and such record date shall be the 15th day of the calendar month next preceding an interest payment date on such Bonds or, in the case of any proposed redemption of Bonds, such record date shall not be more than I 5 days prior to the mailing of notice of redemption of Bonds. ( ~ <. ~,_... ~ ', ~'-., ~ IIi case any Bond shall at any time SECTION 7. Lost, Stolen, Destroyed or Defaced Bonds~ become mutilated in whole or in part, or be lost, stolen or destroyed; or be so defaced as to impair the value thereof to the owner, the County shall execute and the'~registrar/paying Agent shall authenticate and deliver at the principal office of the Registrar/Paying Agent, or send by registered mailto the owner thereof at his request, risk and expense, a new Bond o_f!h-~ Sa!Jle, interes~rate ancfmaturit)i and of like tenor and effect in exchange or substitution for and upon the surrender for cancellation of such defaced, mutilated or partly destroyed Bond, or in lieu of or in substitution for such lost, stolen or destroyed Bond. In any such event the applicant for the issuance of a substitute Bond shall furnish the County and the Registrar/Paying Agent evidence or proof satisfactory to the County and the Registrar/Paying Agent of the loss, destruction, mutilation, defacement or theft of the original Bond, and of the ownership thereof, and also such security and indemnity in such amount as may be required by the laws of the State of South Carolina or such greater amount as may be required by the County and the Registrar/Paying Agent. Any duplicate Bond issued under the provisions of this Section in exchange and substitution for any defaced, mutilated or partly destroyed Bond or in substitution for any allegedly lost, stolen or wholly destroyed Bond shall be entitled to the identical benefits under this Ordinance as was the original Bond in lieu of which such duplicate Bond is issued, and shall be entitled to equal and proportionate benefits with all the other Bonds of the same series issued hereunder. All expenses necessary for the providing of any duplicate Bond shall be borne by the applicant therefor. SECTION 8. Book-Entry-Only System. (a) Notwithstanding anything to the contrary herein, so long as the Bonds are being held under a book-entry system of a securities depository, transfers of beneficial ownership of the Bonds will be effected pursuant to rules and procedures established by such securities depository. The initial securities depository for the Bonds will be The Depository Trust Company ("DTC"), New York, New York. DTC and any successor securities depositories are hereinafter referred to as the "Securities Depository." The Bonds shall be registered in the name of Cede & Co., as the initial securities depository nominee for the Bonds. Cede & Co. and successor securities depository nominees are hereinafter referred to as the "Securities Depository Nominee." (b) As long as a book-entry system is in effect for the Bonds, the Securities Depository Nominee will be recognized as the holder of the Bonds for the purposes of (i) paying the principal, interest and premium, if any, on such Bonds, (ii) if Bonds are to be redeemed in part, selecting the portions of such Bonds to be redeemed, (iii) giving any notice permitted or required to be given to Bondholders under this ordinance, (iv) registering the transfer of Bonds, and (v) requesting any consent or other action to be taken by the holders of such Bonds, and for all other purposes whatsoever, and the County shall not be affected by any notice to the contrary. (c) The County shall not have any responsibility or obligation to any participant, any beneficial owner or any other person claiming a beneficial ownership in any Bonds which are registered to a Securities Depository Nominee under or through the Securities Depository with respect to any action taken by the Securities Depository as holder of such Bonds. 4

7 (d) The County shall pay all principal; interest and premium, if any, on Bonds issued under a bookentry system, only to the Securities Depository or the Securities Depository Nominee, as the case may be, for such Bonds, and all such payments shall be valid and effectual to fully satisfy and discharge the obligations with respect to the principal of and premium, if any, and interest on such Bonds. (e) In the event that the County determines that it is in the best interest of the County to discontinue the book-entry system of transfer for the Bonds, or that the interests of the beneficial owners of the Bonds may be adversely affected if the book-entry system is continued, then the County shall notify the Securities Depository of such determination. In such event, the County shall appoint a Registrar/Paying Agent which shall authenticate, register and deliver physical certificates for the Bonds in exchange for the Bonds registered in the name of the Securities Depository Nominee. (f) In the event that the Securities Depository for the Bonds discontinues providing its services, the County shall either engage the services of another Securities Depository or arrange with a Registrar/Paying Agent for the delivery of physical certificates. in the manner described in (e) above. '""'~ (.. h. h.t:. ~ ;. ~b~ "d d h h ld f d.. -.,..., g) In connection w1t any not1ce or ot er commumcatwn to e prov1 e tot e o ers o Bon s by the County or by the Registrar/Paying Agent with respect to any consent or other action to be taken by the holders of Bonds, the County or the Registrar/Paying Ageni, as th.e case may be, shall establish a record date for such consent or other action and give the See uri ties Depository Nominee. notice of such record date not less than IS days in advance of such record Ciate to the extent. possible. """'1 t"' lli; -... J " v.. ~ ~~,,. 20~ 'II-.-, t"il l.,.... ~" ~ \... SECTION 9. Execution of Bonds. The Bonds shall be executed in the name of the County with the manual or facsimile signature of the Chair attested by the manual or facsimile signature of the Clerk to County Council under a facsimile of the seal of the County which shall be impressed, imprinted or reproduced thereon. The Bonds shall not be valid or become obligatory for any purpose unless there shall have been endorsed thereon a certificate of authentication. Each Bond shall bear a certificate of authentication manually executed by the Registrar/Paying Agent in substantially the form set forth herein. SECTION 10. Form of Bonds. The Bonds shall be in substantially the form attached hereto as Exhibit B. SECTION 11. Security for Bonds. The full faith, credit and taxing power of the County are hereby irrevocably pledged for the payment of the principal and interest on the Bonds as they respectively mature and to create such sinking fund as may be necessary therefor. There shall be levied annually by the Auditor of Beaufort County and collected by the Treasurer of Beaufort County in the same manner as other county taxes are levied and collected, a tax, without liinit, on all taxable property in the County sufficient to pay the principal and interest of the Bonds as they respectively mature and to create such sinking fund as may be necessary therefore. The Auditor and Treasurer of Beaufort County, South Carolina, shall be notified as to the delivery of and payment for the Bonds and are hereby directed to levy and collect, respectively, a tax, without limit, on all taxable property in the County sufficient to pay the principal and interest of the Bonds as they respectively mature and to create such sinking fund as may be necessary therefor. SECTION 12. Exemption from Taxation. Both the principal of and interest on the Bonds shall be exempt, in accordance with the provisions of Section , Code of Laws of South Carolina, 1976, as amended, from all State, county, municipal, school district and all other taxes or assessments, direct or indirect, general or special, whether imposed for the purpose of general revenue or otherwise, except 5

8 inheritance, estate and transfer taxes, but the interest thereon may be includable in certain franchise fees or taxes. SECTION 13. Sale of Bonds, Form of Notice of Sale. The Bonds shall be sold at public sale. A summary Notice of Sale shall be published not less than seven days prior to the date fixed for sale, in a newspaper having general circulation in the State of South Carolina and, if deemed appropriate by the County Administrator, in a financial publication published in the City of New York, State of New York. The official Notice of Sale shall be distributed simultaneously with the distribution of the Preliminary Official Statement prepared in connection with the Bonds, and shall be in the form attached hereto as Exhibit C, with such modifications as may be determined to be necessary by the financial advisor, if any, and bond counsel. The County Administrator may determine to establish a fixed date of sale in the notice or provide for the subsequent dissemination in electronic form of the date selected for such sale, in which event such subsequent notice shall be provided not less than 48 hours prior to the time and date fixed for sale. In the event a fixed date of sale is provided in the notice, such date may be modified by a subsequent notice in electronic form not less than 48 hours prior to the date fixed for the rescheduled sale. In the case of any Bonds to be sold with provision for a rate to be determined by auction, the requirements of this Section 13 shall be satisfied by the publication of the notice and the conduct of the initial auction by the agent appointed by the County Administrator'for such purpose. If the Bonds are to. 1 be sold with a provision for interest to be determined by reference to an index or through the services of a remarketing agent to be appointed, then the County Administrator shall retain a financial advisor to make a competitive selection of any remarketing agent and any credit or liquidity provider required in connection therewith. In connection with the initial offering of the Bonds, the financial advisor and remarketing agent shall provide a notice of sale for, publication to satisfy the.foregoing requirements of this Section 13 and shall accept offers on behalf of the County in a public s~le. \ :... :' ~ -,..:' ~ SECTION 14. Deposit and Use of Proceeds. The proceeds derived from the sale of the Bonds are to be used for the purposes set forth in Section l(i) above, and shall be applied by the County solely to the purposes for which the Bonds have been issued, except that the premium, if any, shall be placed in a sinking fund and the accrued interest, if any, shall be used to discharge in part the first interest to become due on the Bonds. If there are outstanding any BANs, the proceeds of the Bonds shall be first used to discharge the indebtedness represented by the outstanding BANs and second, to the extend proceeds still remain, as otherwise set forth in this section. SECTION 15. Preliminary and Final Official Statement. The County Council hereby authorizes and directs the County Administrator to prepare, or cause to be prepared, a Preliminary Official Statement to be distributed to prospective purchasers of the Bonds together with the Notice of Sale for each sale of the Bonds. The County Council authorizes the County Administrator to designate the Preliminary Official Statement as "near final" for purposes of Rule 15c2-12 of the Securities Exchange Commission. The County Administrator is further authorized to see to the completion of the final form of the Official Statement upon the sale of the Bonds so that it may be provided to the purchaser of the Bonds. SECTION 16. Defeasance. (a) If all of the Bonds issued pursuant to this Ordinance shall have been paid and discharged, then the obligations of the Ordinance hereunder, and all other rights granted thereby shall cease and determine. The Bonds shall be deemed to have been paid and discharged within the meaning of this section under any of the following circumstances: (i) If a bank or other financial institution (the "Escrow Agent") shall hold, at the stated maturities of the Bonds, in trust and irrevocably appropriated thereto, moneys for the full payment thereof; or 6

9 (ii) If default in the payment of the principal of the Bonds or the interest thereon shall have occurred, and thereafter tender of payment shall have been made, and the Escrow Agent shall hold, in trust and irrevocably appropriated thereto, sufficient moneys for the payment thereof to the date of the tender of payment; or (iii) If the County shall have deposited with the Escrow Agent, in an irrevocable trust, either moneys in an amount which shall be sufficient, or direct general obligations of the United States of America, which are not subject to redemption by the issuer prior to the date of maturity thereof, as the case may be, the principal of and interest on which, when due, and, without reinvestment thereof, will provide moneys, which, together with the moneys, if any, deposit:dwith the Escrow Agent at the same time, shall be sufficient to pay, when due, the principal, interest, arid redemption premium or premiums, if any, due and to become due on the Bonds and prior to the maturity,date or dates of the Bonds, or, if the County shall elect to redeem the Bonds prior to their, stated' maturities, and shall have irrevocably bound and obligated itself to give notice of redemption thereof in the' manner provided in the form of the Bonds herein, on and prior to the redemption. date' or dates of the Bonds, as the case may be; or ~.1rftf' )... "'r. '".. ~""". (iv) If there shall have been deposited with the Escrow Agent either moneys in an amount which shall be sufficient, or direct general obligations of the United States of America the principal of and interest on which, when due, will provide moneys which, together with the moneys, if any, deposited with the Escrow Agent at the same time, shall be sufficient to pay, when due, the principal and interest due and to become due on the Bonds on the maturity thereof. (b) In addition to the above requirements of paragraphs (i), (ii), (iii), and (iv), in order for this Ordinance to be discharged, all other fees, expenses and charges of the Escrow Agent have been paid in full at that time. (c) Notwithstanding the satisfaction and discharge of this Ordinance, the Escrow Agent shall continue to be obligated to hold in trust any moneys or investments then held by the Escrow Agent for the payment of the principal of, premium, if any, and interest on, the Bonds, to pay to the owners of the Bonds the funds so held by the Escrow Agent as and when payment becomes due. (d) Any release under this Section shall be without prejudice to the rights of the Escrow Agent to be. paid reasonable compensation for all services rendered under this Ordinance and all reasonable expenses, charges, and other disbursements and those of their respective attorneys, agents, and employees, incurred on and about the performance of the powers and duties under this ordinance. (e) Any moneys which at any time shall be deposited with the Escrow Agent by or on behalf of the County for the purpose of paying and discharging any Bonds shall be and are hereby assigned, transferred, and set over to the Escrow Agent in trust for the respective holders of the Bonds, and the moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. If, through lapse of time or otherwise, the holders of such Bonds shall no longer be entitled to enforce payment of their obligations, then, in that event, it shall be the duty of the Escrow Agent to transfer the funds to the County. (f) In the event any Bonds are not to be redeemed within the 60 days next succeeding the date the deposit required by Section 16(a)(iii) or (iv) is made, the County shall give the Escrow Agent irrevocable instructions to mail, as soon as practicable by registered or certified mail, a notice to the owners of the Bonds at the addresses shown on the registry books that (i) the deposit required by subparagraph (a)(iii) or (a)(iv) of this Section 16 has been made with the Escrow Agent, (ii) the Bonds are deemed to have been paid in accordance with this Section and stating the maturity or redemption dates upon which 7

10 ,,. ' ',.. \... t... ~ '.!'. j... ~ \r '. ' moneys are to be available for the payment of ih'e \i~ijcipalik ~a pr;m1~n('if'any7anj interest on, the Bonds, and (iii) stating whether the County has irrevocably waived,aiiy rights to redeem the Bonds, or any of them, prior to the maturity or redemption dates set forth in the preceding clause (ii). (g) The County covenants and agrees that any moneys which it shall deposit with the Escrow Agent shall be deemed to be deposited in accordance with, and subject to, the applicable provisions of this Section, and whenever it shall have elected to redeem Bonds, it will irrevocably bind and obligate itself to give notice of redemption thereof, and will further authorize and empower the Escrow Agent to cause notice of redemption to be given in its name and on its behalf. SECTION 17. Authority to Issue Bond Anticipation Notes. If the County Administrator and Chair should determine that issuance of bond anticipation notes ("BANs") pursuant to Chapter 17 of Title II of the Code of Laws of South Carolina, 1976, as amended (the "BAN Act") rather than Bonds would result in a substantial savings in interest under prevailing market conditions or for other reasons would be in the best interest of the County, the County Administrator and Chair are hereby further requested and authorized to effect the issuance of BANs pursuant to the BAN Act. If BANs are issued and if, upon the maturity thereof the County Administrator and Chair should determine that further issuance of BANs rather than Bonds would result in a substantial savings in interest under then prevailing market conditions or for other reasons would be in the best interest of the County, the County Administrator and Chair are requested to continue the issuance of BANs until the County Administrator and Chair determine to issue the Bonds on the basis as aforesaid, and the Bonds are issued. SECTION 18. Details of Bond Anticipation Notes. Subject to changes in terms required for any particular issue of BANs, the BANs shall be subject to the following particulars: (a) The BANs shall be dated and bear interest either from the date of delivery thereof or, if the BAN is issued on a draw-down basis,.from the date of each such advance, payable upon the stated maturity thereof, at the rate negotiated by the County Administrator and shall mature on such date, not to exceed one year from the issue date thereof, as shall be determined by the County Administrator. (b) The BANs shall be numbered from one upwards for each issue and shall be in the denomination of $5,000 or any integral multiple thereof requested by the purchaser thereof.. The BANs shall be payable, both as to principal and interest, in legal tender upon maturity, at the principal office of a bank designated by the County or, at the option of the County, by the purchaser thereof. (c) The County Administrator and Chair are authorized to negotiate the sale ofthe BANs and to fix the rate of interest to be borne thereby. (d) The BANs shall be in substantially the form attached hereto as Exhibit D: (e) The BANs shall be issued in fully registered or bearer form or a book-entry-eligible form as specified by the County, or at the option of the County, by the purchaser thereof; provided that once issued, the BANs of any particular issue shall not be reissued in any other form and no exchange shall be made from one form to the other. (f) In the event any BAN is mutilated, lost, stolen or destroyed, the County may execute a new BAN of like date and denomination as that mutilated, lost, stolen or destroyed; provided that, in the case of any mutilated BAN, such mutilated BAN shall first be surrendered to the County, and in the case of any lost, stolen or destroyed BAN, there shall be first furnished to the County evidence of such loss, theft or destruction satisfactory to the County, together with indemnity satisfactory to it; provided that, in the case of a holder which is a bank or insurance company, the agreement of such bank or insurance company to 8 ~- ~... -r~-....., It. ~

11 ~-- - indemnify shall be sufficient. In the event any such BAN shall have matured, instead of issuing a duplicate BAN, the County may pay the same without surrender thereof. The County may charge the holder of such BAN with its reasonable fees and expenses in this connection. (g) Any BAN issued in fully-registered form shall be transferable only upon the books of registry of the County, which shall be kept for that purpose at the office of the County as note registrar (or its duly authorized designee), by the registered owner thereof or by his attorney, duly authorized in writing, upon surrender thereof, together with a written instrument of transfe~ satisfactory to the County as note registrar, duly executed by the registered owner or his duly authoriz6d attofney. Upon the transfer of any BAN, the County shall issue, subject to the provisions of paragraph' (h) below, in the name of the transferee, a new BAN or BANs of the same aggregate principal'amount as-the unpaid principal amount of the surrendered BAN. Any holder of a BAN in fully registered fornl reqiiesting any transfer shall pay any tax or other governmental charge required to be paid with respect thereto., As -t<1 any BAN in fully- t- ~ - - f ' ~ ' - "' ' t '- -- ' - registered fonn, the person in whose name the same shall be registered shall be deemed ari'd regarded as.....,. -,_ 'Y -. ~-... the absolute owner thereof for all purposes, and payment of or 'on account of the principal and interest of any BAN in fully-registered fonn shall be made only to or upon the order of the registered holder thereof, or his duly authorized attorney, and the County shall not be affected by any notice to the contrary, but such registration may be changed as herein provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such BAN to the extent of the sum or sums so paid. (h) BANs issued in fully registered form, upon surrender thereof at the offic-e of the County (or at such office as may be designated by its designee) as note registrar, with a written instrument of transfer satisfactory to the County, duly executed by the holder of the BAN or his duly authorized attorney, may, at the option of the holder of the BAN, and upon payment by such holder of any charges which the County may make as provided in paragraph (i), be exchanged for a principal amount of BANs in fully registered fonn of any other authorized denomination equal to the unpaid principal amount of surrendered BANs. (i) In all cases in which the privilege of exchanging or transferring BANs in fully registered fonn is exercised, the County shall execute and deliver BANs in accordance with the provisions of such Ordinance. All BANs in fully registered fonn surrendered in any such exchanges or transfers shall forthwith be canceled by the County. There shall be no charge to the holder of such BAN for such exchange or transfer of BANs in fully-registered fonn except that the County may make a charge sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or transfer. SECTION 19. Security for Bond Anticipation Notes. For the payment of the principal of and interest on the BANs as the same shall fall due, the full faith, credit and taxing power of the County shall be pledged. In addition thereto, so much of the principal proceeds of the Bonds when issued shall and is hereby directed to be applied, to the extent necessary, to the payment of the BANs; and, further, the County covenants and agrees to effect the issuance of sufficient BANs or Bonds in order that the proceeds thereof will be sufficient to provide for the retirement of any BANs issued pursuant hereto. SECTION 20. Tax and Securities Laws Covenants. (a) The County covenants that no use of the proceeds of the sale of the Bonds shall be made which, if such use had been reasonably expected on the date of issue of such Bonds would have caused the Bonds to be "arbitrage bonds," as defined in the Code, and to that end the County shall comply with the applicable regulations of the Treasury Department previously promulgated under Section I 03 of the Internal Revenue Code of 1954, as amended, and any regulations promulgated under the Code so long as the Bonds are outstanding. 9

12 (b) The County further covenants to take all action necessary, including the payment of any rebate amount, to comply with Section 148(f) of the Code and any regulations promulgated thereunder. (c) The County covenants to file IRS Fonn 8038-G at the time and in the place required therefor under the Code. (d) The County hereby covenants and agrees that it will comply with and carry out all of the provisions of a supplement (which shall have been approved as to fonn by bond counsel) to that certain Disclosure Dissemination Agent Agreement, dated March 28, 2002, as supplemented December II, 2002, July 15, 2003, and November 10, 2004, between the County and Digital Assurance Certification, L.L.C., to be executed by the County Administrator and dated the date of delivery of tbe Bonds, which will meet the requirements of (i) Rule 15c2-12 promulgated by the Securities and Exchange Commission and (ii) Section , Code of Laws of South Carolina, 1976, as such may be amended, which requires, among other things, that tbe County file with a nationally recognized municipal securities information repository, a copy of its annual independent audit within 30 days of its receipt and acceptance and event-specific infonnation, within 30 days of an event adversely affecting more than 5% of its revenues or 5% of its tax base. -~ SECTION 21. Notice Pursuant to Section ll-27.:.io/pa~agraph 8, of the Code of Laws of South Carolina, In order that the Council may proceed as soon as possible to issue and deliver that series of the Bonds, the proceeds of which are to be used for the Capital Projects, the County Administrator may determine that the County avail itself of the provisions tlf paragraph 8 of Section , Code of Laws of South Carolina, 1976, as amended. If such detenninntion is" made; the notice prescribed thereby shall be provided; the form which shall be s,!i.b.sta~t~~ly 11s set fo_rth~i~ ~xhibit ~~,~! ~ 1 :.:_: ",... ii. -~"" ' ~o "1 "... - SECTION 22. Retention of Financial Advisor an'd Other Suppliers. The County Council hereby authorizes the County Administrator to retain a financial advisor in order to advise bond counsel and the County in connection with the issuance of the Bonds and to retain Brent Jeffcoat, Esq., of McGuire Woods LLP, as its bond counsel in connection with the issuance of the Bonds. In the event the County Administrator determines that some or all of the Bonds should be sold with provisions for variable rates, the County Administrator may, with the advice of a. financial advisor retain the appropriate consultants such as a remarketing agent, an auction agent, and related parties and may enter into agreements relating thereto. In the case of any Bonds that are to be sold with provisions for liquidity support by means of a bank letter of credit, the County Administrator, with the advice of a financial advisor, is authorized to select a provider of such letter of credit after conducting a competitive selection process and to enter into such agreements as are necessary or appropriate in connection therewith. The County Council hereby further authorizes the County Administrator to enter into such contractual arrangements with printers and the suppliers of other goods and services necessary to tbe sale, execution and delivery of the Bonds as is necessary and desirable. To the extent feasible, such arrangements shall be made with persons of sound reputation after obtaining two or more bids for such services; however, the County Administrator is authorized to make such arrangements without obtaining bids or quotes where (i) the services to be provided are unique or (ii) it is impractical to obtain bids in order to comply with any time requirements with respect to the issuance and sale of the Bonds or (iii) the County has had previous experience with a supplier who has performed reliably and satisfactorily. 10

13 SECTION 23. Authorization to Execute Documents. The County Council hereby authorizes the Chair and Clerk of County Council, the County Administrator and the Controller of the County to execute such documents and instruments as may be necessary to effect the issuance of the Bonds. SECTION 24. General Repealer. All rules, regulations, resolutions and parts thereof, procedural or otherwise, in conflict herewith or the proceedings authorizing the issuance of the Bonds are, to the extent of such conflict, hereby repealed and this Ordinance shall take effect and be in full force from and after its adoption. II

14 Adopted this 12th day of June,

15 EXHIBIT A CAPITAL PROJECTS Beaufort County Projects for FY 2006 Bond Issue St Helena Library DSN Administration DSN Residences (3) Government Office Building Land Acquisition Alternate Emergency Operations Center Boat Landing- Paiges Point Boat Landing - Brickyard Point Senior Center Facility Bluffton Gym renovations Bluffton Media Building renovations Detention Center renovations Mosquito Control Building - roof Basil Green Complex renovations Technical College -south campus Hilton Head Park Projects Contingency $ 5,000,000 4,000,000 1,200,000 1,200,000 1,000, , , ,000 72, , , , , ,000 1,500, , $17,800,000 A-1

16 EXHIBITB FORM OF BOND No.R- Interest Rate UNITED STATES OF AMERICA STATE OF SOUTH CAROLINA BEAUFORT COUNTY GENERAL OBLIGATION BOND, SERlES 2006 Maturity Date Original" ~,~ ~..... :Jj;'!~~~:~rtf& _,j r~...._.. ~. ' "'' )<: r" Issue Datt ' " \/ CUSIP.. It\ f"j_h:~~ ~ t. V Ci.;jf"J'< ",J 1 )"~' if:\~ r ~~......,.,~., ~;~ ~ ~ REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS KNOW ALL MEN BY THESE PRESENTS, that Beaufort County, South Carolina (the "County"), is justly indebted and, for value received, hereby promises to pay to the registered holder named above, or registered assigns, the principal amount shown above on the maturity date shown above, upon presentation and surrender of this bond at the principal office of [Registrar/Paying Agent] (the "Registrar/Paying Agent"), and to pay interest on such principal sum from the date hereof at the interest rate per annum shown above until the County's obligation with respect to the payment of such principal sum shall be discharged. Interest on this bond is payable semiannually on I and I of each year commencing I, 2006, until this bond matures, and shall be payable by check or draft mailed to the person in whose name this bond is registered on the registration books of the County maintained by the Registrar/Paying Agent, at the close of business on the 15th day of the calendar month next preceding each semiannual interest payment date. The principal and interest on this bond are payable in any coin or currency of the United States of America which is, at the time of payment, legal tender for public and private debts, provided, however, that interest on this fully registered bond shall be paid by check or draft as set forth above. This bond is one of an issue of bonds (the "Bonds") of like date of original issue, tenor and effect, except as to number, date of maturity, denomination and rate of interest, issued in an original aggregate principal amount of issued pursuanuo and in accordance with the Constitution and laws of the State of South Carolina, including Article X, Section 14 of the Constitution of the State of South Carolina, 1895, as amended; Chapter 15, Title 4 and Chapters 15 and 27, Title II, Code of Laws of South Carolina, 1976, as amended; and an ordinance duly adopted by the Beaufort County Council on, 2006 (together, the "Ordinance"). This bond shall not be valid or obligatory for any purpose, until the Certificate of Authentication hereon shall have been duly executed by the Registrar/Paying Agent. B-1

17 For the payment of the principal and interest on this bond as they respectively mature and for the creation of such sinking fund as may be necessary therefor, the full faith, credit and taxing power of the County are hereby irrevocably pledged, and there shall be levied annually by the County Auditor and collected by the County Treasurer in the same manner as other county taxes are levied and collected, a tax, without limit, on all taxable property in the County sufficient to pay the principal and interest of this bond as they respectively mature and to create such sinking fund as may be necessary therefor. The Bonds are being issued by means of a book-entry system with no physical distribution of Bond certificates to be made except as provided in the Ordinance. One bond certificate with respect to each date on which the Bonds are stated to mature, registered in the name of the Securities Depository Nominee, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's Participants, beneficial ownership of the Bonds in the principal amount of $5,000 or any multiple thereof being evidenced in the records of such Participants. Transfers of ownership shall be effected on the records of the Securities Depository on the records of the Securities Depository and its Participants pursuant to rules and procedures established by the Securities Depository and its Participants. The County, and the Paying Agent will recognize the Securities Depository Nominee, while the registered owner of this bond, as the owner of this bond for all purposes, including payments of principal of and redemption premium, if any, and interest on this bond, notices and voting. Transfer of principal and interest payments to Participants of the Securities Depository,will be the responsibility of the Securities Depository, and transfer of principal, redemption premium: if. any, and interest payments to beneficial owners of the Bonds by Participants of the Securities,Depo~itory' will be the responsibility of such Participants and other nominees of such beneficial owners. The County will not be responsible or liable for such transfers of payments or for maintaining, supervision or. reviewing the records maintained by the Securities Depository, the Securities Depository Nominee, its Participants or persons acting through such Participants. While the Securities Depository,Nomine'e is the owner of this bond,. notwithstanding, the provision hereinabove contained, payments of principal of, redemption premium,~ if any, and interest on this bond shall be made in accordance with' existing arrangements between the Paying Agent or its successors under the Ordinance and the Securities Depository. [The Bonds maturing on or prior to I,, shall not be subject to redemption prior to their stated maturities. The Bonds maturing on or after I,, shall be subject to redemption at the option of the County on or after I,, as a whole or in part at any time, and if in part in such order of maturities as shall be determined by the County, at the redemption prices with respect to each Bond, expressed as a percentage of the principal amount of the Bonds to be redeemed, set forth below, together with the interest accrued thereon to the date fixed for redemption: Period During Which Redeemed (both dates inclusive) Redemption Price If less than all the Bonds of any maturity are called for redemption, the Bonds of such maturity to be redeemed shall be selected by lot by the Registrar/Paying Agent or by the Securities Depository in accordance with its procedures. In the event this bond is redeemable as aforesaid, and shall be called for redemption, notice ofihe redemption hereof, describing this bond and specifying the redemption date and B-2